Elon Musk sent a letter to Twitter listing more reasons he could end his deal to buy the company.
Key details
Most recently, Musk has sent a letter to the social media company detailing additional reasons he believes he can back out of the major deal.
In the letter dated August 29, Musk refers to Twitter’s former security chief, Peiter Zatko’s whistleblower complaint.
He says the complaint “demonstrates that Twitter has breached the following provisions of the Merger Agreement, thereby giving the Musk Parties the right to terminate the Merger Agreement.”
The letter from Musk and his lawyers goes on to say that Zatko’s complaint confirms the far-reaching misconducts at Twitter and is likely to have major consequences for the company.
Why it’s news
Elon Musk has attempted to back out of his $44 billion deal to buy Twitter due to the platform having too many fake accounts and the company giving misleading data about itself for months.
The recent complaint from Zatko seems to be putting this long battle in Musk’s favor. Investors are confident that the complaint added just what Musk needed to win the fight.
Lawyers for Musk and Twitter have subpoenaed Zatko. Musk’s lawyers are seeking documents relating to the effect of false or spam accounts on Twitter’s business operations, among other requests, according to a court filing, according to Barron’s.
Backing up a bit
In April, Elon Musk announced that he held a 9.2% stake in Twitter, which made him the social-media company’s largest shareholder. Twitter’s stock price soared 25 percent after the announcement.
Later that month, the billionaire entrepreneur offered to buy all of Twitter at $54.20 per share—equaling about $44 billion. He said he originally invested in the platform because he believes it is failing in its potential to be the leading platform for free speech around the globe. In fact, he asked his 2 million followers if Twitter adhered to principles of free speech, and 70 percent said “no.”
Last month, Musk decided to back out of the deal, claiming there were too many fake accounts on the platform. Twitter has since sued Musk in Delaware Court of Chancery to complete the deal and requested the trial to take place in September. Musk, on the other hand, wanted to delay the trial until February 2023, stating that a case of this size takes time to prepare. Twitter was granted its wish of an expedited trial, with Chancellor Kathaleen McCormick, the presiding judge, setting a five-day trial for October.
Musk then countersued Twitter, stating his reason for the termination was due to Twitter not being upfront about the number of fake accounts on the platform.
Most recently, Elon Musk and his legal team have subpoenaed Twitter’s founder and former CEO Jack Dorsey, to get him to release documents that provide accurate information on bots and spam accounts on the social-media platform and now these documents have come out from Zatko and Musk and his lawyers have subpoenaed him as well.
The trial is set for October, unless it can be settled before that date approaches.
